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  • Question

    What is a Labor Surplus Area Designation? Where can this information be found? Is this designation company specific? Or is it specific to a state? city? region? Thank you for the help.


    Answer

    According to the SBA.gov website, Congress created a number of small business programs to create jobs and further economic development.  One of these procurement tools is the Labor Surplus Area program. This program was a created during the post Korean war era.  Some other procurement tools to create economic development that followed the Labor Surplus Area Program include the 1977 Local Public Works Act, the HUBZone Act, the Stafford Act, and the American Recovery and Reinvestment Act of 2009. 

    What are labor surplus areas?  Labor surplus areas are designated by the United States Department of Labor as having high unemployment.  Employers located in these areas can be given preferences in bidding on federal procurement contracts.  The purpose in providing such preferences is to help direct the government’s procurement dollars into areas where people are in the most severe economic need.

    The Small Business Act was amended by Public Law 95-89 to provide for labor surplus area set-asides for ALL businesses.  After the passage of this law, President Carter issued a labor surplus executive order, Executive Order 12073 in 1978.

    Today, while the Department of Labor continues to designate areas as labor surplus, the elements of the early LSA program are now embodied in the new HUBZone program of the SBA.

    The SBA should be able to assist you if you are unsure about your company's designation. 

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